Strategic Innovation And Performance Of Commercial Banks Listed In The Nairobi Securities Exchange
In the contemporary unstable environment, reliance on regulatory protection and stable product paradigm does not sustain performance. Variation of the traditional industry assumptions, creation of new and significant customer value, crafting of new growth strategies and change of the existing business model is a sure means of enhancing long term success and survival. Strategic innovation enables firms to compete in an existing business in a fundamentally different way. The objective of the study was to establish the influence of strategic innovation on the performance of commercial banks that are listed in the Nairobi securities Exchange. The study adopted descriptive cross sectional survey design. To establish the influence of strategic innovation on performance of commercial listed banks, multiple hierarchical regressions were performed on strategic innovation indicators and the performance indicators. The study revealed that there was a strong positive relationship between the combined effect of the strategic innovation indicators and all performance measures. The results were statistically significance to be relied upon to formulate conclusions and for theory development. The limitations of the study included its focus on only listed commercial banks which restricted the generalization of the findings and reliance on regression analysis that left out possible curvilinear relationship among the study variables. The researcher suggests that future research should focus on other analysis tools and such studies have to include other institutions that are not necessarily listed. The implication of the findings is the need for the management to align strategic innovation strategy with the wider business strategy. They have to demonstrate their capability in understanding the customer insights and offer new and significant value if their long term success and survival is to be guaranteed. The success of strategic innovation greatly depends on the ability of the firm to protect the new business model and scale it up quickly. By scaling up quickly, it assures the practicing firm of growth and protects it from counter attacks from their key competitors.